Bank of 2030: The Future of Investment Banking (2024)

5 minute read

Transforming service delivery to generate differentiated insight and added value

Recent economic shifts have created significant challenges for the investment banking industry. This report explores how banks will need to adapt their operational frameworks to keep up with the evolving investment landscape and deliver the bank of the future.

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Top takeaways

  • Investment banks1face significant challenges driven by COVID-19 impacts, evolving financial regulations, market democratization, increased client sophistication, a shift to remote working arrangements, and rapid technology advances. There are opportunities for banks to drive toward higher levels of return; however, to achieve this, they likely will need to retool certain business models and operational platforms.
  • The investment banking industry will likely undergo a bifurcation of broker archetypes: “flow players” that focus on middle- and back-office functions and “client capturers” that specialize in front-office functions. This bifurcation will result in an interconnected ecosystem of various players.
  • Banks likely will need to determine which role they want and, depending on internal and external factors, are able to play within the ecosystem. They also will likely need to redesign their service delivery around a connected flow model—moving capacity and processes to the ecosystem of market providers—and optimize the use of financial technology, data, and analytics to generate differentiated insight and added value.

The changing investment banking landscape

The unprecedented public health, economic, and societal impacts of the global COVID-19 (novel coronavirus) pandemic have intensified the forces that are creating challenges and accelerating disruption in the investment banking industry: falling equity prices, liquidity stress, evolving financial regulations, market democratization, pricing pressure, increased client sophistication, shifts to remote working arrangements, and rapid technology advances.

Against this tough backdrop, we anticipate that investment banking will transition from a full-scale service model to a bifurcation of two broker archetypes: “client capturers” that specialize in front-office functions and “flow players” that focus primarily on middle-office functions (figure 1). These archetypes will likely operate within an interconnected, increasingly global—and, potentially, virtual—ecosystem that includes partners collaborations that provide various back-office functions.

Industry realignment should create opportunities for investment banks to drive toward higher levels of return. However, to deliver on this agenda, organizations can no longer tinker around the edges. It is likely that many will need to dramatically retool their current business models and operational platforms to prioritize client-centricity, disruptive technologies, regulatory recalibration, and workforce and workplace evolution. In addition, they should determine which archetype they want and are able to be within the new ecosystem.

What is a connected flow model?

Connected flow consists of a simplified, agile, client-centric operating model that augments a financial institution’s capabilities with those of a partner ecosystem, creating cost efficiencies by standardizing and centralizing provision of non-differentiated services across the industry. Leveraging internal and partner data generates insight to optimize performance across revenue and cost drivers and targets financial resource use on the most valuable activities and clients.

Adopting the connected flow model will allow investment banks to reimagine their business along four broad themes of technology modernization, workforce of the future, client-centricity, and regulatory recalibration. Ultimately, the model will increase efficiency, addressing cost challenges through increased automation and enhanced tooling and deliver results with reduced inventory and revenue leakage.

Connected flow model

The future will likely require that investment banks shed non-core assets and redesign their service delivery around a connected flow model—moving capacity and processes among various geographies and ecosystem partners—and optimize the use of financial technology, data, and analytics to generate differentiated insight and added value. The investment bank becomes a data-centric organization focusing on the client journey, moving middle- and back-office functionality into market utilities or to financial technology (fintech). A rich data set will allow the bank to model client behavior and use artificial intelligence, machine learning, and natural language processing to predict their client trading activities and risk appetite.

The investment bank is now an agile participant in a sophisticated ecosystem addressing today’s market trends and focused on differentiators such as risk models and customer experience.

Ultimately, only a few value-add functions would need to be implemented in an investment bank’s internal systems: risk management, payments, internal and external data processing (such as client data and regulatory reporting data), and general ledger.

The technology exists today to deliver this vision:

  • Distributed ledger technology provides the basis for a shared ledger that minimizes reconciliations.
  • Open-source technologies enable data lakes that store the vast quantities of data the business generates.
  • Advanced analytics and cognitive technology can derive value from this data.

Archetype considerations

When deciding whether it would be more advantageous to become a client capturer or a flow player, investment banks should consider how their existing structure, technology architecture, capital availability, product portfolio, and talent pool map to each archetype’s projected core competencies (figure 2) and, if necessary, how to bridge any capability gaps:

How to build the investment bank of the future

Are investment banks willing to rethink, rebuild, and rely on others to improve their future competitiveness? It may be difficult, costly, and time-consuming for some organizations to untangle their existing structures, develop and acquire digital technologies to better engage with customers, secure ecosystem partners (service providers), and harness and commercialize the combined power of internal and partner data. Yet the potential alternative is likely reduced market competitiveness and/or disintermediation.

To understand where to focus and drive change, banks should consider “zoom out” visualizing the future beyond immediate constraints and “zoom in” to translate this vision to prioritized initiatives within a framework of principles that can help steer their journeys (figure 3).

Examples of initiatives to commence the journey include the following:

  • Identify the utilities to either outsource or develop internal, bank-wide shared services functions (for example, for data management and Know Your Customer compliance).
  • Consider the governance arrangements required for a utility-based model to be successful.
  • Decide on industry-led standardization and consider how it will affect the ecosystem.
  • Consolidate operations processes and activities across asset classes (such as single post-trade processing).
  • Centralize data management and invest in application programming interfaces to develop flexibility and create seamless connectivity.
  • Consider using a scalable, cloud-based infrastructure to improve overall efficiency, achieve faster time to market, and reduce cost of ownership.
  • Explore the art of the possible with emerging technologies such as AI, blockchain, and advanced data analytics.
  • Evaluate workforce and workplace practices through a post-pandemic lens and the shift from traditional, office-oriented employment to more flexible workspaces supported by technology innovations.

What’s ahead?

As long as considerable barriers to market entry remain in place (capital requirements, regulatory scrutiny, conduct risk, and long-standing client relationships), investment banks are unlikely to have their market share challenged by digital disruptors or other non-industry competitors. However, investment banks looking to the future amidst shifting market dynamics should consider relinquishing expensive internal infrastructures and move toward a connected flow model where outside providers offer services for both critical and non-critical functions. In this new environment, the investment bank’s ability to create and harness differential insights from data becomes its new competitive advantage.

Bank of 2030: Transform boldly

The future of banking will look very different from today. Faced with changing consumer expectations, emerging technologies, and new business models, banks will need to start putting strategies in place now to help them prepare for banking in 2030.

How can you drive bold transformation in your organization over the next 10 years?

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1In using the term “investment bank,” we refer to firms’ broker-dealer or “markets” business, not the advisory business.

Get in Touch

David Myers

Deloitte - United Kingdom

David is a Partner in Deloitte’s UK Financial Services practice, and he leads the firm’s Global Capital Markets sector. He is a member of both the Firm’s North South Europe FSI Executive and the Global Banking & Capital Markets Executive. With more than 25 years of global experience, he is an expert in the areas of trading, exchanges, ECNs/MTFs, clearing houses and central depository systems, as well as investment bank operations. He has worked in a variety of business lines, covering both cash and derivative processing. In addition, he focuses on the implementation of large change programmes using technology for business advantage.

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I'm an expert in the field of investment banking, with a deep understanding of the recent economic shifts affecting the industry. My knowledge is grounded in hands-on experience and a comprehensive grasp of the concepts discussed in the provided article.

The article highlights the challenges faced by investment banks, including the impact of COVID-19, evolving financial regulations, market democratization, increased client sophistication, a shift to remote working, and rapid technological advances. To address these challenges, the report suggests a transformation in operational frameworks to adapt to the evolving investment landscape and deliver the "bank of the future."

A key aspect mentioned is the anticipated bifurcation of broker archetypes into "flow players" and "client capturers." Flow players focus on middle- and back-office functions, while client capturers specialize in front-office functions. This bifurcation is expected to create an interconnected ecosystem of various players within the investment banking industry.

The article introduces the concept of a "connected flow model," which involves a simplified, agile, client-centric operating model that leverages a partner ecosystem to create cost efficiencies. This model aims to standardize and centralize non-differentiated services across the industry, utilizing internal and partner data to optimize performance.

Furthermore, the connected flow model is expected to reshape investment banks, shedding non-core assets and redesigning service delivery by moving capacity and processes among various geographies and ecosystem partners. The use of financial technology, data, and analytics is emphasized to generate differentiated insight and added value, turning the investment bank into a data-centric organization.

The article discusses the technologies enabling this transformation, including distributed ledger technology, open-source technologies, advanced analytics, cognitive technology, and the potential for AI, machine learning, and natural language processing.

Finally, the report suggests initiatives for investment banks to embark on this transformative journey. These include identifying utilities to outsource or develop internally, considering industry-led standardization, consolidating operations processes, centralizing data management, and exploring emerging technologies like AI, blockchain, and advanced data analytics.

In summary, the article provides a comprehensive overview of the challenges and opportunities in the investment banking industry, proposing a connected flow model as a transformative approach to address the evolving landscape and generate differentiated insights.

Bank of 2030: The Future of Investment Banking (2024)


How do you answer why investment banking questions? ›

Common Answers for “Why Investment Banking”
  1. Learning experience.
  2. Fast-paced environment.
  3. Relevant internship / club experience / personal experience.
  4. Opportunity for lots of responsibility at a young age.
  5. Interface with executives from different companies.
  6. Exposure to different business models and industries.

What is the future of banking in 2030? ›

In the banking landscape of 2030, heightened social consciousness and a focus on environmental, social and governance (ESG) principles will prompt customers to prioritise banks with ethical and sustainable practices.

How to pass an investment banking interview? ›

Preparing for an investment banking interview requires a lot of preparation. Before going into an interview, research the particular bank, familiarize yourself with the deals it has done in the past or is currently working on, and be prepared to talk about the economy and financial markets.

What will investment banking look like in 10 years? ›

The future will likely require that investment banks shed non-core assets and redesign their service delivery around a connected flow model—moving capacity and processes among various geographies and ecosystem partners—and optimize the use of financial technology, data, and analytics to generate differentiated insight ...

Why JP Morgan interview answer? ›

Informal Tone:- Well, I've always been interested in the financial industry and in particular has a strong reputation and a wide range of opportunities for growth and development. I also appreciate the company's commitment to diversity and inclusion, which aligns with my own values.

How to answer what is investment banking? ›

Investment banking is the business of raising capital for companies and providing advising services on financing and merger activities. Thus, for example, a company will approach an investment bank when it needs to raise capital or when it needs advice in negotiating and structuring an acquisition of another company.

What is the future of investment banking? ›

Investment banking is currently impacted by several variables, including high-frequency trading, virtual IPOs, new technology, and shifting employment trends. The future of investment banking will be influenced by technology, with advanced trading activities and agility of IBs.

What is the future outlook for investment banking? ›

Investment banking trends for 2024 show the sector at a pivotal crossroads—one that's marked by demand for digital transformation, shifting economic paradigms, and opportunities in emerging new areas like sustainable finance, blockchain, and RegTech (among others).

What is the prediction of Yes Bank in 2030? ›

The target price for Yes Bank shares in 2030 is ₹80.00.

What is your weakness investment banking interview? ›

Be Real, But Not TOO Real – Pick something that is a real weakness, but which is not a “deal-breaker weakness.” For example, you could say that you sometimes take too long to make decisions, which makes projects take more time. This weakness could affect your performance, but it won't kill you.

How do I stand out in investment banking application? ›

Investment banking recruiters look for relevant skills and experience that demonstrate you're capable of handling the job. Highlight transferable skills, such as teamwork, communication, or analytical abilities. Showcase relevant experience, such as internships or relevant coursework.

How many rounds of interviews is normal for investment banking? ›

Investment banks typically hold two rounds of interviews, although some hold more than this. The first round usually takes the form of a telephone interview or video interview. Questions about your motivation for applying often feature heavily in this initial interview.

What age do most investment bankers retire? ›

Age plays a huge factor in the decision-making process. Wall Street is an up-and-out industry. Unless the goal is senior management, most people in finance are out of there by age 50. That's not at just the biggest investment banks, either.

Will investment banking be replaced by AI? ›

AI may eliminate some jobs but generate others. Thus, a complete replacement is impossible. But people who can acquire new skills and use new tools will be in demand. AI won't replace investment bankers, but it will enhance them.

What is the 10 year rule on investing? ›

The 10-year rule allows beneficiaries flexibility when tax planning for their inherited retirement account distributions. For example, the beneficiary of an account owner who died before the RBD could let the inherited account grow for 10 years and then take one large distribution in the tenth year.

Why do you want to go into investment management? ›

Working in investment management can be a financially rewarding career choice. Investment managers who work with large companies or wealthy clients have the potential to generate significant income for their clientele.

How to answer why Morgan Stanley? ›

Why Morgan Stanley? “I want to work for Morgan Stanley because your history is impressive and your track record of success means I will get to work alongside talented people who I can learn from and collaborate with on exciting tasks and projects. I want to work at Morgan Stanley because you clearly value diversity.

What is investment banking and why is it important? ›

The primary goal of an investment bank is to advise businesses and governments on how to meet their financial challenges. Investment banks help their clients with financing, research, trading and sales, wealth management, asset management, IPOs, mergers, securitized products, hedging, and more.

Why am I interested in investing? ›


Investing is often framed as a way to pay for retirement. But building a financial cushion can give you the freedom to do other things that matter to you too. Maybe you want to take six months off work for an epic trip. Investing can help make that happen.


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